'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Thematic (Sector/Industry)

<p style="text-align: center;"><strong>•BEST &amp; WORST 13th AUGUST •</strong></p><p>The 'best' of yesterday's large-cap announcements came from <a href="https://www.smartkarma.com/entities/rakus-co-ltd" target="_blank" data-smartkarma-citation="entities:29200:1" rel="noopener">Rakus (3923 JP)</a>, the 'worst' from <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP)</a>.  More extensive coverage follows in the<strong> DETAIL</strong> section below.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/152/408/original/2020-08-14_05-05-16.png?1597349134" class="editor-image img-responsive" data-smartkarma-image-id="152408"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/152/409/original/2020-08-14_05-05-59.png?1597349190" class="editor-image img-responsive" data-smartkarma-image-id="152409"></figure><div class="content-caption">Source • Japan Analytics</div><hr><div><p style="text-align: center;"><strong>DAILY STATS</strong></p></div><hr><div><p><strong>PERCENTAGES</strong> - <strong>58%</strong> of quarterly results, <strong>48%</strong> of annual forecasts/revisions and <strong>61%</strong> of interim forecasts have negative Scores and <strong>30%</strong> of companies reporting lost money for the quarter.</p></div><hr><div><p style="text-align: center;"><strong>170 Quarterly Results</strong></p></div><div><ul>
<li>
<strong>Results Score:</strong> 29% Positive / 12% Neutral / 58% Negative</li>
<li>
<strong>Average Results Score Change: -</strong>2.7 points</li>
<li>
<strong>Average % Change in Revenue:</strong> -10.8% Quarter YoY / +5.0% Rolling TTM YoY </li>
<li>
<strong>Average Operating Profit Margin Change:</strong> -1.3 ppt</li>
<li>
<strong>Percentage Making Quarterly Losses:</strong> 30%</li>
</ul></div><hr><div><p style="text-align: center;"><strong>56 Annual • 23 Interim Forecasts/Revisions</strong></p></div><div><ul>
<li>Annual Forecast/Revision Score: 38% Positive / 14% Neutral / 48% Negative</li>
<li>Interim Forecast/Revision Score Change: 26% Positive / 13% Neutral / 61% Negative</li>
<li>Average Forecast/Revision Score Change: -2.2 points</li>
</ul></div>

•BEST &amp; WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP).  More extensive coverage follows in the DETAIL section below.Source • Japan AnalyticsDAILY STATSPERCENTAGES - 58% of quarterly results, 48% of annual forecasts/revisions and 61% of interim forecasts have negative Scores and 30% of companies reporting lost money for the quarter.170 Quarterly Results

Results Score: 29% Positive / 12% Neutral / 58% Negative

Average Results Score Change: -2.7 points

Average % Change in Revenue: -10.8% Quarter YoY / +5.0% Rolling TTM YoY 

Average Operating Profit Margin Change: -1.3 ppt

Percentage Making Quarterly Losses: 30%
56 Annual • 23 Interim Forecasts/Revisions
Annual Forecast/Revision Score: 38% Positive / 14% Neutral / 48% Negative
Interim Forecast/Revision Score Change: 26% Positive / 13% Neutral / 61% Negative
Average Forecast/Revision Score Change: -2.2 points


🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Equity Bottom-Up

<p>Japanese sporting goods company <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP)</a>’s share price and consensus FY+2 EV/OP has declined by 2.8% and 8.4% respectively, since our previous insight on 12<sup>th</sup> June 2020: <a href="https://www.smartkarma.com/insights/asics-at-a-20-year-forward-ev-op-peak" target="_blank" rel="noopener">ASICS: At a 20-Year Forward EV/​OP Peak</a>. However, the company is still trading at <a target="_blank">23.9x </a>FY+2 EV/OP, 28% higher than the 52-week average.</p><p>The company posts sales trends for its direct retail outlets in chart format every two weeks and according to the latest charts, sales trends in Japan, Europe, and the U.S have materially weakened over the last 3-4 weeks. However, the consensus FY+2 OP estimate was increased 6% during that time, possibly due to the positive news flows about the progress of the COVID-19 vaccine trials and the postponement of the Tokyo Olympics till July 2021.</p><p>The economic impact of COVID-19 is expected to outlast the health impact, and we believe the recent upward revision of the consensus FY+2 OP is untimely, especially given the weakening own store retail sales trend.</p>

Japanese sporting goods company ASICS Corp (7936 JP)’s share price and consensus FY+2 EV/OP has declined by 2.8% and 8.4% respectively, since our previous insight on 12th June 2020: ASICS: At a 20-Year Forward EV/​OP Peak. However, the company is still trading at 23.9x FY+2 EV/OP, 28% higher than the 52-week average.The company posts sales trends for its direct retail outlets in chart format every two weeks and according to the latest charts, sales trends in Japan, Europe, and the U.S have materially weakened over the last 3-4 weeks. However, the consensus FY+2 OP estimate was increased 6% during that time, possibly due to the positive news flows about the progress of the COVID-19 vaccine trials and the postponement of the Tokyo Olympics till July 2021.The economic impact of COVID-19 is expected to outlast the health impact, and we believe the recent upward revision of the consensus FY+2 OP is untimely, especially given the weakening own store retail sales trend.

ASICS: Near 20-Year Forward EV/​OP Peak

<p>Japanese sporting goods company <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" data-smartkarma-citation="entities:16287:1" rel="noopener">ASICS Corp (7936 JP) </a>has started posting sales trends for its direct retail outlets in chart format every two weeks and will continue to do so for the rest of the year. No sales data is provided, however, sales trends in Japan, Europe and the US remained weak until the end of May. Asics China, however, recorded positive year-on-year sales growth over the last four weeks.</p>
<p>Asics is currently trading at a twenty-year peak FY+2 EV/OP multiple of 26.1x. Our target price of ¥783, based on the 5-year average for this ratio, implies a 41.9% downside from the current price.</p>
<h3>EV/EBIT- FY+2</h3>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/139/405/original/image_11376073521591862142863.png?1591862144" class="editor-image img-responsive" data-smartkarma-image-id="139405"></figure>
<div class="content-caption">Source: Cap IQ</div>

Japanese sporting goods company ASICS Corp (7936 JP) has started posting sales trends for its direct retail outlets in chart format every two weeks and will continue to do so for the rest of the year. No sales data is provided, however, sales trends in Japan, Europe and the US remained weak until the end of May. Asics China, however, recorded positive year-on-year sales growth over the last four weeks.
Asics is currently trading at a twenty-year peak FY+2 EV/OP multiple of 26.1x. Our target price of ¥783, based on the 5-year average for this ratio, implies a 41.9% downside from the current price.
EV/EBIT- FY+2

Source: Cap IQ

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/139/255/original/2020-06-11_08-36-54.png?1591832240" class="editor-image img-responsive" data-smartkarma-image-id="139255"></figure><div class="content-caption">Source: Japan Analytics</div><p><strong>STRESS TESTS</strong> - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through the current euphoria and assess where business risk is concentrated among larger Japanese companies. According to Tokyo Shoko Research, 171 listed Japanese firms have raised nearly ¥10 trillion in new funds to weather COVID-19.</p><p><strong>ALTMAN Z-SCORES</strong> - The first Insight will update our earlier Who's<a href="https://www.smartkarma.com/insights/japan-who-s-swimming-naked-part-2-altman-z-score" target="_blank" data-smartkarma-citation="insights:37316" rel="noopener"> Swimming Naked?</a> Insight and focus on the Altman Z-Score as updated for the most recent quarterly results for both manufacturing and non-manufacturing companies.  In each category, ee will look at both the companies that are below Altman's 'distress' levels and those companies that have the most significant negative deviation from their seven-year average score. Only six of the bottom-thirty manufacturing and five of the bottom-thirty manufacturing companies have outperformed over one year. Many are already Oversold and offer potential value opportunities -as with <a href="https://www.smartkarma.com/entities/nissan-motor-co-ltd" target="_blank" data-smartkarma-citation="entities:72:1" rel="noopener">Nissan Motor (7201 JP)</a> which is now as distressed as when Carlos Ghosn first arrived.  </p><p><strong>QUASI-FINANCIAL FIRMS</strong> - The Z-Score methodology does not work for financial firms. Accordingly, five non-financial companies which have significant financial subsidiaries - <strong> <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten (4755 JP)</a></strong>,<strong> <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a></strong>, <strong><a href="https://www.smartkarma.com/entities/japan-post-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:359:1" rel="noopener">Japan Post (6178 JP)</a></strong>, <strong><a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a></strong> and <strong><a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a></strong>- have been excluded from this analysis. </p>

Source: Japan AnalyticsSTRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through the current euphoria and assess where business risk is concentrated among larger Japanese companies. According to Tokyo Shoko Research, 171 listed Japanese firms have raised nearly ¥10 trillion in new funds to weather COVID-19.ALTMAN Z-SCORES - The first Insight will update our earlier Who's Swimming Naked? Insight and focus on the Altman Z-Score as updated for the most recent quarterly results for both manufacturing and non-manufacturing companies.  In each category, ee will look at both the companies that are below Altman's 'distress' levels and those companies that have the most significant negative deviation from their seven-year average score. Only six of the bottom-thirty manufacturing and five of the bottom-thirty manufacturing companies have outperformed over one year. Many are already Oversold and offer potential value opportunities -as with Nissan Motor (7201 JP) which is now as distressed as when Carlos Ghosn first arrived.  QUASI-FINANCIAL FIRMS - The Z-Score methodology does not work for financial firms. Accordingly, five non-financial companies which have significant financial subsidiaries -  Rakuten (4755 JP), Z Holdings (4689 JP), Japan Post (6178 JP), Softbank Group (9984 JP) and Sony (6758 JP)- have been excluded from this analysis. 

🇯🇵 JAPAN - Stress Tests Part 1 - Altman Z-Scores

<ul class="">
<li>Japanese sporting goods company <a href="https://www.smartkarma.com/entities/asics-corp" target="_blank" rel="noopener">Asics (7936 JP)</a> released its first-quarter results on Friday, May 22nd after a two-week delay due to COVID-19.</li>
<li>Revenue declined by 13.5% year-on-year due to store closures in multiple regions.</li>
</ul>
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 112.25pt;"></td>
<td style="width: 99.45pt;">
<p>Share of Total Revenue</p>
</td>
<td style="width: 103.5pt;">
<p>Revenue Growth/Decline</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>Japan</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">36%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">-8.3%</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>North America</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">18%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">-21.1%</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>Europe</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">25%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">-12.1%</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>Greater China</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">8%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">-17.2%</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>Oceanian Region</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">6%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">4.9%</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>Southeast and South Asia</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">3%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">-8.4%</p>
</td>
</tr>
<tr>
<td style="width: 112.25pt;">
<p>Others</p>
</td>
<td style="width: 99.45pt;">
<p style="text-align: right;">4%</p>
</td>
<td style="width: 103.5pt;">
<p style="text-align: right;">-29.0%</p>
</td>
</tr>
</tbody>
</table>
<div class="content-caption">Source: Company Disclosures</div>
<div>
<div>
<ul>
<li>Q1 Operating Income fell by ¥7 billion year-on-year to an operating loss of ¥882 million. The first quarter has been Asics’s most profitable quarter over the past five years, generated 65% of the annual OP.</li>
<li>The company withdrew its initial forecasts for the year which were made in February which called for sales of ¥400 billion and operating profits of ¥9 billion.</li>
<li>ASICS also withdrew its previously-issued forecast of a ¥30 per share dividend.</li>
</ul>
</div>
</div>


Japanese sporting goods company Asics (7936 JP) released its first-quarter results on Friday, May 22nd after a two-week delay due to COVID-19.
Revenue declined by 13.5% year-on-year due to store closures in multiple regions.






Share of Total Revenue


Revenue Growth/Decline




Japan


36%


-8.3%




North America


18%


-21.1%




Europe


25%


-12.1%




Greater China


8%


-17.2%




Oceanian Region


6%


4.9%




Southeast and South Asia


3%


-8.4%




Others


4%


-29.0%




Source: Company Disclosures



Q1 Operating Income fell by ¥7 billion year-on-year to an operating loss of ¥882 million. The first quarter has been Asics’s most profitable quarter over the past five years, generated 65% of the annual OP.
The company withdrew its initial forecasts for the year which were made in February which called for sales of ¥400 billion and operating profits of ¥9 billion.
ASICS also withdrew its previously-issued forecast of a ¥30 per share dividend.




ASICS Withholds Guidance: Possibility of Full-Term Loss

Japan

ASICS CORPORATION manufactures general sporting goods and equipment.  The Company's products, such as athletic shoes and sportswear, are distributed in the United States, Europe, Australia, and Asia.

Price Gauge
52-week Range	0.00 - 0.00
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ASICS Corp (7936 JP)

🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

•BEST & WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP). ...

Campbell Gunn

ASICS: Near 20-Year Forward EV/OP Peak

Japanese sporting goods company ASICS Corp (7936 JP)’s share price and consensus FY+2 EV/OP has declined by 2.8% and 8.4% respectively, since our...

Oshadhi Kumarasiri

ASICS: At a 20-Year Forward EV/OP Peak

Japanese sporting goods company ASICS Corp (7936 JP) has started posting sales trends for its direct retail outlets in chart format every two weeks...

Oshadhi Kumarasiri

🇯🇵 JAPAN - Stress Tests Part 1 - Altman Z-Scores

STRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through...

Campbell Gunn

ASICS Withholds Guidance: Possibility of Full-Term Loss

Japanese sporting goods company Asics (7936 JP) released its first-quarter results on Friday, May 22nd after a two-week delay due to...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

🇯🇵 JAPAN • Results & Revisions 13th August - Asics, FUJIFILM, Dentsu, Mitsubishi Shoji

•BEST & WORST 13th AUGUST •The 'best' of yesterday's large-cap announcements came from Rakus (3923 JP), the 'worst' from ASICS Corp (7936 JP). ...

Campbell Gunn

ASICS: Near 20-Year Forward EV/​OP Peak

Japanese sporting goods company ASICS Corp (7936 JP)’s share price and consensus FY+2 EV/OP has declined by 2.8% and 8.4% respectively, since our...

Oshadhi Kumarasiri

ASICS: At a 20-Year Forward EV/OP Peak

Japanese sporting goods company ASICS Corp (7936 JP) has started posting sales trends for its direct retail outlets in chart format every two weeks...

Oshadhi Kumarasiri

🇯🇵 JAPAN - Stress Tests Part 1 - Altman Z-Scores

STRESS TESTS - This Insight is the first in a series that will use a variety of standard and less-frequently used 'stress-tests' to look through...

Campbell Gunn

ASICS Withholds Guidance: Possibility of Full-Term Loss

Japanese sporting goods company Asics (7936 JP) released its first-quarter results on Friday, May 22nd after a two-week delay due to...

Oshadhi Kumarasiri

ASICS: Near 20-Year Forward EV/OP Peak